October 06, 2022

IAG Index: sustained growth for Italian VC ecosystem



The last few years have shown a sustained growth of Venture Capital in Italy: in the first half of 2022 alone, our country almost reached the total investment in 2021 (957 million euros), an increase of 123 percent compared to the same period last year.

At the sector level, the latest data had shown an increasing interest in fintech, especially thanks to the various market players that have enabled the development of new channels and more innovative financial services, leading to successful all-Italian initiatives, such as Scalapay, which officially became last February the first unicorn in our country.

This trend was again noted by the latest IAG Index, a thermometer of the startup ecosystem that constantly monitors the evolution and changes in seed venture capital, highlighting the variety of investment opportunities available to the Italian Angels for Growth network.

The positive results obtained by the Fintech sector accompany the confirmation of IAG's interest in companies with a digital model and the Life Science sector, which remains one of the industries that Business Angels monitor with particular attention.

Recent years have witnessed an exponential growth of new biotech startups, mainly as university spin-offs with very high potential. Life Science sector is evolving rapidly in Italy and around the world, thanks in part to the strong commitment of governments, investors, and entrepreneurs to countering the COVID-19 pandemic.

The life science supply chain represents an asset of great strategic value, as demonstrated by some success stories in the IAG portfolio. This is the case of Kither Biotech, a Turin-based biopharmaceutical company developing novel therapies for rare respiratory diseases, which recently closed an €18.5 million Series B round, also involving international VC funds, after being funded in previous rounds and supported in its development and preclinical validation plan by Italian investors.

The IAG Index confirms the preference of IAG business angels to focus on Seed stage projects, which correspond to 63.3 percent of the startups analyzed.

This figure is the result of IAG's commitment, as a club deal, to "smart money," i.e., capital that comes from investors who can actively contribute to projects, giving full support to Italian startups even at the strategic level, up to the point of making them ready for internationalization.

The result shows a slight decrease from the previous year in favor of the Pre-seed and Series A rounds, which saw an increase of +51 percent and +9.7 percent, respectively.

Pre-money valuations in the last 12 months show a growing trend again: comparing the data with those of 2021 shows a significant increase in values in all sectors and in all types of rounds, by 26.9% in Pre-seed, 30.3% in Seed and 17% in Series A, respectively. Valuations in Series A rounds in particular show significant increases in both Digital (+18.2%) and Deeptech (+19%).

Policies to support entrepreneurship and strategic projects, the 2.5 billion euros put in place at the beginning of 2022 by MISE and assigned to CDP Venture Capital Sgr for investments in startups and innovative SMEs, have had a decisive impact on the entire innovative startup ecosystem in Italy, attracting new investors, both domestic and international, to our country and growing the Italian venture capital market.

The Diversity & Inclusion theme is taking on an increasingly relevant role: gender diversity now takes a central position and represents a fundamental component for the development of a startup and for being able to seize innovation opportunities and market needs at 360°.

IAG business angels consolidate their attention to this issue, confirming the positive data of recent years: more than 40 percent of the companies analyzed in the last 12 months have at least one female entrepreneur on the founding team, indicating a now structural component of female presence in entrepreneurial teams. This is demonstrated by the active investments in the IAG portfolio: Futurely, a digital guidance and career coaching platform conceived by Elisa Piscitelli and Mariapaola Testa, which closed a $1.5 million round, and Mirta, the Milanese e-commerce portal dedicated to Made in Italy excellence founded by Martina Capriotti and Ciro Di Lanno, which raised $2.5 million in 2021.

The growth of female teams among Fintech startups is confirmed, where, since 2020, there has been a rise from one in every 5 female founders to one in every 2.5. Although the other sectors show slightly declining figures from the previous year, the +23% growth of "female" startups in the Fintech sector makes it possible to confirm the 2021 result.

The introduction of the ESG parameter in 2021 is an expression of a cultural change, aimed at recognizing the value of a company measurable not only on its economic-financial performance but also on its ability to internally apply the principles of ethics and sustainability. The IAG Index 2022 highlights a positive result: the share of ESG-compliant startups exceeded most deals analyzed (51.9 percent), underscoring the dedication to green investments.

Carlo Tassi, President of Italian Angels for Growth: "In these 15 years of activity as a leader in Italian seed venture capital, IAG has always supported entrepreneurship and innovative ideas, thanks to its constant presence in investments, institutional activities, industry meetings and sharing of expertise to support valuable projects. The IAG index is a particularly interesting tool for monitoring the innovation ecosystem and capturing trends of change in the Italian landscape."

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